GOVERNANCE: A SENSE OF OWNERSHIP

I retired from membership of Leeds City Council almost a year ago. I had enjoyed much of my six-year stint but, while I’m definitely a political animal, I’m afraid party-political loyalty is something of a challenge when you pride yourself as being an ever-sceptical pursuer of truth! Nevertheless, I had found a role in the UK’s second-largest local authority which suited that disposition: as Chair, for three years, of the Council’s Corporate Governance and Audit Committee. I confess that I hadn’t previously thought very hard about the differences between management (which I’ve studied, taught and practised) and governance – so I did some pretty intense learning over those three years, reading a lot of official reports, and thinking about the nature of governance in a variety of public, private and third-sector organisations. I had also become a trustee of CIOB, which falls in the third of those categories.

My previous (employed) working life had been spent mainly in colleges and universities – but governance had largely passed me by. Even as Dean of a large faculty I’d been only dimly aware of who was sitting on the Board of Governors (the great and the good?) and what they were up to (providing sage advice but normally supporting the VC’s recommendations until, rarely, push came to shove?). Certainly that view had been borne out by my three experiences as a school governor: I hope I was of of some use, but I’m afraid I never experienced a real sense of ownership. My trusteeship at CIOB is different altogether: as a member of the Institute for the whole of my adult life, my sense of belonging is absolute.

These thoughts are prompted by a report on university governance by Malcolm Gillies (published on 31.03.11 by the HE Policy Institute). He proposes, in essence, that universities should be governed by those with the greatest stake in their reputations: their graduates. Given that, under the coming funding regime, these are the people who will be providing the bulk of the funds – and that the alumni of every university ought to embrace the full range of governance skills – the idea makes sense.

Organisations that engender a real sense of ownership seem to do well in most areas of corporate life. That is confirmed by a recent study from Indiana University which found that internal recruitment of chief executives produced better results, over a wide range of performance measures, than external recruitment. Unsurprisingly, the internally appointed CEOs were paid less than those brought in from outside, but they also stayed longer. My experience suggests that, while all organisations occasionally need new blood at the highest level, internal talent is often under-valued by those charged with corporate governance.